Whether you’re a general contractor, plumber, electrician, or remodeler, one thing is certain: you need contractor insurance. It not only protects your business from financial loss due to accidents, injuries, or property damage but also ensures you’re compliant with local regulations and client requirements. But one of the most common questions contractors have is: how much is contractor insurance?
The answer isn’t one-size-fits-all. Contractor insurance costs can vary widely based on your trade, location, business size, and coverage needs. In this article, we’ll break down the types of insurance contractors typically need, the average cost of each, and the key factors that impact pricing—plus, where to go for a custom quote, such as Tothfelty Insurance, a trusted source for contractor insurance solutions.
Types of Contractor Insurance and Their Costs
Contractor insurance isn’t a single policy—it’s usually a combination of coverages tailored to your business. Here’s a breakdown of the most common types of contractor insurance and how much each one typically costs:
1. General Liability Insurance
- Covers: Third-party bodily injury, property damage, and legal defense costs.
- Who Needs It: All contractors, regardless of trade.
This is the most basic form of protection and is often required before you can start a job. It protects you if someone gets hurt or property is damaged due to your work.
2. Workers’ Compensation Insurance
- Covers: Medical expenses and lost wages for employees injured on the job.
- Who Needs It: Contractors with employees (mandatory in most states).
Premiums are heavily influenced by the nature of the work—roofers pay more than painters due to the higher risk involved.
3. Commercial Auto Insurance
- Covers: Damage or injuries resulting from accidents involving your work vehicle.
- Who Needs It: Any contractor using vehicles for business.
Even if you drive your personal truck to job sites, you may need a commercial policy if it’s used regularly for work.
4. Tools and Equipment Insurance
- Covers: Theft or damage of tools and equipment you own or rent.
- Who Needs It: Contractors who regularly transport and use tools on job sites.
This coverage ensures you’re not left replacing expensive gear out of pocket.
5. Professional Liability (Errors & Omissions)
- Covers: Claims of negligence, errors, or failure to deliver promised services.
- Who Needs It: Contractors offering design-build services, consultations, or project management.
This is especially important for trades that involve project planning or technical specs.
6. Builder’s Risk Insurance
- Cost: 1% to 4% of the total construction cost
- Covers: Structures under construction from damage due to fire, theft, or natural disasters.
- Who Needs It: Contractors and developers working on new builds or major renovations.
Keep in mind, that these are general estimates. To get an accurate quote tailored to your business, visit Tothfelty.com. They specialize in contractor coverage and can provide personalized plans to fit your exact needs.
What Affects the Cost of Contractor Insurance?
Several variables influence your insurance premiums:
- Type of Work You Do: High-risk jobs like roofing or excavation cost more to insure than painting or drywall.
- Location: Insurance rates differ from state to state and even by ZIP code.
- Number of Employees: The more people you employ, the higher your workers’ comp premiums.
- Claims History: A history of frequent claims can raise your rates significantly.
- Coverage Limits and Deductibles: Higher limits offer more protection but increase premiums. A higher deductible lowers your premium but increases your out-of-pocket risk.
Tips to Save on Contractor Insurance
- Bundle Policies: Combine general liability, auto, and tools insurance for multi-policy discounts.
- Improve Safety Protocols: Fewer accidents mean fewer claims and lower premiums.
- Shop Around Annually: Compare quotes each year to ensure you’re getting the best deal.
- Work with a Specialist Broker: Agencies like Tothfelty Insurance understand contractor needs and can help you find affordable, comprehensive coverage.
Why Contractor Insurance Is Worth the Investment
Contractor insurance isn’t just about compliance—it’s a financial safety net that protects your livelihood. A single lawsuit, injury, or equipment theft can set your business back thousands of dollars. The right insurance policy helps you weather these challenges without draining your savings or shutting down your operation.
Conclusion
So, how much is contractor insurance? The short answer: it depends. Your trade, location, team size, and coverage needs all play a role.
To get an accurate estimate tailored to your business, contact a trusted agency like Tothfelty Insurance. With decades of experience serving contractors across industries, they’ll help you navigate coverage options and find the most cost-effective plan for your needs.